A northern regulator has approved a controversial lead-zinc mine in a national park reserve and world heritage site.
The Mackenzie Environmental Impact and Review Board has recommended federal Northern Development Minister John Duncan give the final OK to Canadian Zinc Corp.'s (TSX:CZN) Prairie Creek mine in the Nahanni National Park Reserve.
"I'm very happy," said Canadian Zinc president John Kearney.
"We hope with this positive report that the timelines can now move quickly."
Kearney said he doesn't anticipate any problems meeting the conditions recommended by the board, which involve improving water storage, tailings storage and management and transportation of ore concentrate.
The mine in the Northwest Territories has been bitterly opposed by environmentalists and the board's approval was not unanimous.
Two board members said not enough weight was given to aboriginal concerns about water quality. They added that the majority who ruled in favour of the mine relied too heavily on company promises that weren't backed up by solid plans.
"The majority report provides no mandatory framework to ensure that any of these commitments will be undertaken," they wrote. "In the absence of such uncertainty, we find ourselves unable to agree that significant impacts from this development will be avoided and are unlikely."
Review board chairman Richard Edjericon acknowledged the board has issued a divided recommendation only once before.
"It's very rare," he said. "We have always strived to work toward consensus. We just didn't reach it this time."
Prairie Creek flows into the Nahanni River, one of Canada's most scenic wilderness rivers and a global destination for canoeists. The area is prime habitat for Dall sheep, woodland caribou and grizzly bears.
UNESCO declared the area a world heritage site in 1978.
Much of the bedrock under the land is highly permeable, which makes it vulnerable to any type of spill or contamination.
The mine property was completely surrounded by the Nahanni National Park Reserve when it was expanded by then-environment minister Jim Prentice in 2009. However, the company kept its mineral rights.
The board said the underground mine, which was largely constructed in the 1980s but never operated, wouldn't pose any significant environmental hazard.
"We're satisfied that the project can be operated and closed with minimal impacts on the environment," Kearney said. "We have designed this with the highest standards and the best protection in mind."
Kris Brekke of the Canadian Parks and Wilderness Society pointed out the board didn't ask the company for binding commitments on 25 pages of promises it made to mitigate environmental concerns.
"If a development located upstream of a national park is to proceed, it must be regulated to the highest environmental standard," Brekke said.
"It appears that the review has passed the responsibility to the minister and other regulatory authorities to ensure that Canadian Zinc will be accountable."
The project now goes before the Mackenzie Valley Land and Water Board for specific construction permits.
"They deal with all the conditions and the detail of the permits," Kearney said.
Much of the mine infrastructure needs to be updated or replaced, including the power plant and water treatment facility, he acknowledged. Approval to upgrade the road to the site was granted previously.
Kearney said benefits agreements are in place for the two closest aboriginal communities of Nahanni Butte and Fort Simpson. An agreement with the territorial government commits Canadian Zinc to hiring 60 per cent northerners and 25 per cent aboriginal staff.
If all goes smoothly, construction could begin late next year with production by late 2013.
The Prairie Creek deposit contains zinc, lead and silver. Output would start at 600 tonnes a day and could double over time.
The company estimates building the mine would create 170 jobs, with about 220 jobs during the lifespan of the mine -- expected to be at least 20 years.
The Vancouver-based company's stock went up six cents to 76 cents a share on the Toronto Stock Exchange by the end of trade Friday.
